AN ELEGANT KIDS' STORE FAILS

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Gaye and Roy Raymond scored a smashing success with Victoria's Secret, a small chain of stores offering fine lingerie directly and by mail order: In 1982, they sold the chain to The Limited for a reported $4 million.

But their efforts to score again with My Child's Destiny, selling elegant -and elegantly priced - children's products, did not fare nearly as well.

In October, four years after they invested their personal profits from Victoria's in the new business, they filed for Chapter 11 protection, ending their catalogue sales and closing the doors of their children's department store here. Baby Bjorn Potty Chair

The concept was a simple one: well-heeled parents could shop for everything from an Apple computer to a Baby Bjorn imported Swedish potty chair to a Galway Irish crystal baby bottle labeled ''for decorative use only - not to be used to feed baby,'' all under one roof, or by catalogue. The Raymonds figured that imported clothing, home computers and quality toys would hold great attraction for the growing number of professional couples having their first, and possibly only, child.

But while the success of other retailers - such as New York's Penny Whistle Toy Shop and Wicker Garden's Children - attests to the validity of that approach, the Raymonds found that tapping into that market was not so easy.

One problem seemed to be the ritzy image the company conveyed. Many people who saw it still remember the concern's 1984 advertisement: two perfect, blond children staring resolutely out from behind classic tortoise shell glasses in the pages of The New Yorker, right next to the theater reviews and above the ads for vacations in Barbados.

The little girl is pictured in a print dress with an elaborate lace collar. The little boy is in a suit and tie, and looks as though he is well on his way to becoming an investment banker just like Daddy. Discreetly written underneath the picture are the words ''My Child's Destiny.'' 'Out of My League'

Terry Gutierrez, who designs displays for a local San Francisco department store, was shopping for bargains at the store's recent liquidation sale. She clearly remembers the ad as her lasting impression of the store. It made her feel like My Child's Destiny was ''out of my league because I don't have the income.''

Mr. Raymond acknowledged that the advertisement had had a negative effect on some potential customers.

''We did eight catalogue covers, but that one is the only one people remember,'' he said. ''People either loved it and thought it was cute, or thought it was terrible to take kids and dress them up as little adults.''

Stephen L. Brotman, the president of Child Craft, based in Edison, N.J., a store that specializes in catalogue sales of quality educational toys and children's furniture, also remembers the advertisement. ''The style in which they went at it appeals to a very narrow market'' he said. ''There is a small market out there for the yuppie baby, but even yuppies don't want to overpay. Everybody still wants value for their money. My Child's Destiny was elitist.'' 'Fun Toys'

The failure of My Child's Destiny should not be interpreted as a lack of vitality in the quality toy market, Mr. Brotman added. Child Craft's parent company, Groiler Inc., which specializes in direct mail of children's books, recently purchased Just For Kids, a mail-order business in what Groiler's vice president, Andrew Reinhart, described as ''fun toys'' with annual sales of $7 million.

Meredith Brokaw, who founded Penny Whistle Toy Shop in 1978, agrees that many parents are willing to pay for high-quality, lasting toys that have a place in childhood development, and are looking for a retailer who will sort those items out from fad items.

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''Parents are very busy these days and they need a retailer with a really clear vision of what can be good for their kids,'' she said. Penny Whistle now has three retail outlets.

In planning My Child's Destiny, the Raymonds considered demographic studies showing that professional couples were waiting until they were older to have a baby, and they reasoned that these parents have more money to spend on their child.

But the situation may not be quite so simple. Professional women are increasingly dropping out of the work force or switching to part-time work when their baby is born, thereby decreasing the household income just at the time the first child arrives to be a drain on it. A recent study by the American Enterprise Institute in Washington, D.C., showed that the highest proportion of women with full-time jobs were divorced mothers. Women Buy Most Toys

Few such women are likely to view themselves as being in a financial position to shop at elite stores. And as Mr. Brotman points out, women are the purchasers of nearly all children's toys.

With regards to his latest retail venture, Mr. Raymond said it was not image so much as location that hastened its demise. Located midblock on Grant Avenue just one block off the main downtown shopping area of Union Square, the store seemed well placed for merchandising top-of-the-line children's products. The major department stores such as Saks Fifth Avenue, I. Magnin and Neiman-Marcus were only a block away. The street itself is home to some of San Francisco's finest art galleries and elegant jewlery stores, including Tiffany's and Shreve.

And it was only a few blocks walk from the financial district, so that Mom and Dad could drop in on their lunch hour and snap up a cotton playsuit with ice cream cones on it emblazoned with the message ''gelato'' for the child who knows the difference.

But Mr. Raymond said the store never enjoyed the heavy ''walk-by traffic'' he had expected. Many of the retail spaces in the refurbished building in which the store is situated went unrented for some time, giving the block an abandoned look. The recent addition of such upscale adult clothing stores as Eileen West next door and Comme des Garcons across the street proved too late. 'The Critical Mass'

''We just didn't have the critical mass to attract the shoppers,'' Mr. Raymond said.

And other retailers in the market suggest that that the failure of My Child's Destiny to attract choosy walk-in customers may have also contributed to the failure of its catalogue sales as well. Meredith Brokaw said that her toy stores use mailers not so much as moneymakers but as a way to keep in touch with established customers of the retail outlets.

Melanie Nerenberg, the administrative assistant for Wicker Garden's Children, an infant and children's clothing store on Madison Avenue in New York, agrees that parents purchasing what is investment-quality clothing for children want experience with the store and its merchandise before ordering through the mail.

Many of her store's customers now place telephone orders or respond to a catalogue mailing, but only after they have been to the store and checked items for sizing and cut, and felt the quality of materials themselves, she said.

The Raymond's store suffered from a sort of cultural schizophrenia as well. Moderately priced mass- produced items such as Oshkosh overalls for 2-year-olds were to be found next to $42 imported models.

And a series of educational books on the lives of prominent women such as Betty Friedan and Margaret Thatcher was cheek-by-jowl with a set of miniature pots and pans whose packaging depicted a little girl happily ensconced in the kitchen that could have come straight out of the 1950's.

A version of this article appears in print on December 27, 1986, on Page 1001029 of the National edition with the headline: AN ELEGANT KIDS' STORE FAILS. Order Reprints|Today's Paper|Subscribe